Monitoring Renewable Energy Performance of Power Plants
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MONITORING RENEWABLE ENERGY PERFORMANCE OF POWER PLANTS PROGRESS OF PERFORMANCE UP TO JUNE 2020 (ISSUE 16) (ISSUE 16 – OCTOBER 2020) Authors and Contributors: A Gxasheka, N Ndlovu, R Mokoena, M Moroeng, P Mogatusi, M Kgopa Contact Email: [email protected] Telephone No.: 012 401 4600 Page 2 of 26 Contents GLOSSARY OF TERMS ....................................................................................................................................................... 4 ABBREVIATIONS AND ACRONYMS ............................................................................................................................ 5 1. INTRODUCTION AND BACKGROUND .................................................................................................................... 6 2. UPDATE ON GRID-CONNECTED CAPACITY OF RENEWABLE ENERGY PROJECTS ............................... 7 3. ENERGY YIELD OF RENEWABLE ENERGY PLANTS CONNECTED TO THE GRID .................................. 10 4. RECENT GLOBAL PRICE TRENDS FOR RENEWABLE ENERGY TECHNOLOGIES .................................. 13 5. RENEWABLE ENERGY COST IN SOUTH AFRICA ............................................................................................. 14 6. CONTRIBUTION OF RENEWABLE ENERGY TO SOCIAL ECONOMIC DEVELOPMENT ........................... 16 6.1. ECONOMIC DEVELOPMENT OBLIGATIONS OF IPP PROJECTS ........................................................ 16 6.2. DATA SOURCE FOR SED IPPS .................................................................................................................... 17 6.3. EMPLOYMENT BY RE POWER PLANTS .................................................................................................... 19 6.4. SOCIO-ECONOMIC DEVELOPMENT AND ENTERPRISE DEVELOPMENT ........................................ 20 6.4.1. SOCIO-ECONOMIC DEVELOPMENT PERFORMANCE ...................................................................... 20 6.4.2. ENTERPRISE DEVELOPMENT PERFORMANCE ................................................................................ 20 6.5. OWNERSHIP PERFORMANCE ..................................................................................................................... 21 6.6. PREFERENTIAL PROCUREMENT PERFORMANCE ............................................................................... 21 7. CONCLUDING REMARKS ........................................................................................................................................ 22 APPENDIX A: REI4P COMMUNITY PROJECTS .................................................................................................. 23 Page 3 of 26 GLOSSARY OF TERMS Bid window Means any of the procurement phases under the Renewable Energy Independent Power Producer Procurement Programme of the Department of Mineral Resources and Energy. Energy Regulator Means the regulatory authority established as a juristic person in terms of section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). Government Means the Government of the Republic of South Africa, and any of its departments, agencies or other entities that it manages or controls. Gigawatt hour Energy unit in which electricity consumption is measured. 1GWh = 1000MWh. Independent power producer Is defined as a typically limited-liability, investor-owned enterprise that generates electricity either for bulk sale to an electric utility or for retail sale to industrial or other customers with certain conditions. Megawatt hour Energy unit in which electricity consumption is measured. 1MWh = 1000kWh. Minister Means Minister of Mineral Resources and Energy. Renewable energy (from the 2003 White Paper on Renewable Energy) Renewable energy harnesses naturally occurring non-depletable sources of energy, such as solar, wind, biomass, hydro, tidal, wave, ocean current and geothermal, to produce electricity, gaseous and liquid fuels, heat or a combination of these energy types. Page 4 of 26 ABBREVIATIONS AND ACRONYMS B-BBEE Broad-Based Black Economic Empowerment BW Bid Window COD Commercial Operation Date COP Conference of Parties CSP Concentrated Solar Power DMRE Department of Mineral Resource and Energy ED Economic Development EME Exempted Micro Enterprises GWh Gigawatt hour IDM Integrated Demand Management IPP Independent Power Producer IRP Integrated Resource Plan MW Megawatt MWh Megawatt hour MYPD Multi-Year Price Determination NERSA National Energy Regulator of South Africa PPA Power Purchase Agreement PV Photovoltaic QME Qualifying Medium Enterprise QSE Qualifying Small Enterprise RE Renewable Energy REI4P Renewable Energy Independent Power Producer Procurement Programme SED Socio-Economic Development SSEG Small-scale embedded generator SONA State of the Nation Address Page 5 of 26 1. INTRODUCTION AND BACKGROUND In support of the implementation of the Gazetted Integrated Resource Plan 2019 (IRP2019), on 30 July 2020, the National Energy Regulator of South Africa (NERSA) concurred with the Ministerial Determination, aimed at procuring 11 813MW of capacity from various sources of energy, with a majority of this capacity allocated for solar photovoltaic (PV) and wind technologies. This fullfills one of the energy security measures that were indicated in President Ramaphosa’s State of the Nation Address (SONA) of 14 February 2020. From the 11 813 MW of Ministerial Determination capacity that NERSA concurred with, 6 800 MW will be procured from PV and wind from 2022 to 2024. The remaining capacity will include the following allocations – 513 MW of storage in 2022; 3 000 MW of gas and diesel from 2024 to 2027; and 1 500 MW of coal from 2023 to 2027. Table 1 below summarises the allocations of various technologies. Table 1: Summary of 2020 Determination with various technologies Technology Capacity (MW) Time horizon in IRP 2019 PV and wind 6 800 2022 – 2024 Storage 513 2022 Gas and diesel 3 000 2024 – 2027 Coal 1 500 2023 – 2027 Total Determination Capacity (MW) 11 813 Table 2 shows all Renewable Energy (RE) determinations made in the past, including the new determination made in 2020, which contains capacity allocations of solar PV and wind technologies. To date, the total RE capacity allocation from ministerial determinations is now 21 525 MW1. Table 2: Renewable energy ministerial determinations Ministerial Determination Year start Year end Capacity (MW) Renewable 2011 2012 2016 3 725 Renewable 2012 2017 2020 3 200 Renewable 2015 2021 2025 6 300 Renewable (Solar Park) 2026 2028 1 500 Solar PV, Wind Determination 2020 2022 2024 6 800 RE capacity (MW) 21 525 Procured Expired To be procured In line with the Government’s short-to-medium-term goals of ensuring security of power supply, NERSA is also registering small-scale distributed generation for own use, and these are installations under one megawatt (MW), for which no licence is required. In addition to this, all applications or installations with capacity above 1 MW that produce electricity for own use from commercial and industrial users, are processed by NERSA within the prescribed period of 120 days. 1 Following the updated IRP2019, the two RE Determinations from IRP2010-2030 made in 2015 (6 300 MW Renewable 2015 and 1 500 MW Renewable Solar - November 2015), for which capacities were not contracted, have now expired and have been replaced with 2020 Determination that has allocations of solar PV and wind. Page 6 of 26 In the following section, an update of the capacity of operating RE projects is given. In section 3, the energy production in the previous financial year (2019/20) is reported for purposes of giving indicative spending of the IPP projects. The section also gives an update on the energy and costs in the first half of 2020. Section 4 highlights global price trends of RE technologies that have been selected in IRP2019 horizon. Section 5 discusses socio-economic achievements of Renewable Energy Independent Power Producer Procurement Programme (REI4P). The last section summarises the key points of the report. 2. UPDATE ON GRID-CONNECTED CAPACITY OF RENEWABLE ENERGY PROJECTS To date, DMRE has procured 6 422 MW from 112 PP projects, through seven bid windows (BWs). These BWs were: BW1, BW2, BW3, BW4, including BW 3.5 of concentrated solar technology with thermal storage, and two BWs of small-scale renewable energy projects. Over the years, RE4IP projects have been connected into the grid in a phased-in approach, based on their scheduled commercial operation dates. By the end of June 2020, the total grid installed capacity of projects was 4 300 MW. Of this installed capacity, 4 283MW is in commercial operation. This capacity is from 68 REI4P projects. Table 3 below shows the summary of the status of projects in terms of operation and development. Table 3: Status of procured DMRE RE IPP projects as at 30 June 2020 Bid window Total Procured Installed Commercial Status Expected annual number capacity Capacity Operational energy (GWh) at of (MW) (MW) (MW) P502 projects 1 28 1 425 1 425 1415 All operational 3 712 2 19 1 040 1 040 1036 All operational 2 982 3 17 1 452 1 435 1432 16 operational; 4 805 one under construction 3.5 2 200 100 100 One operational 485 4 26 2 205 300 300 4 operational; the 7 213 rest are under construction Small-scale 1 10 50 0 0 Delayed signing 175 of PPAs Small-scale 2 10 49 0 0 Delayed signing 106 of PPAs TOTALS 112 6 422 4 300 4 283 - 19 478 Figure 1 shows the cumulative commercial capacity over the years. By the end of the current year, it is expected that this capacity will reach 5 048 MW since nine projects